Austin Council Approves Plan to Add 20,000 Homes, 2,000 Affordable Units

Austin City Council approved a new density bonus program in May 2026, permitting developers to construct buildings up to 90 feet tall-known as DB90-in exchange for commitments to include income-restricted affordable housing. The program is expected to add nearly 20,000 homes overall, including roughly 2,000 affordable units, according to city documents.

The initiative is part of a broader push by Austin officials to increase housing supply and address affordability pressures. The city has also issued resolutions of support for six affordable housing developments in 2026, enabling their applications for 9% Low-Income Housing Tax Credits. Up to $7.16 million in funding is available, sufficient to support three to four of those projects.

Adjusting HOME Rules and Responding to State Law

Separately, officials are seeking changes to the rules governing the HOME (Home Ownership for Middle-income Empowerment) initiative in 2026. Proposed revisions would reduce lot width and side yard requirements, simplify porch and garage features, and clarify allowances for two homes on 3,600-square-foot lots. The changes aim to address low activity in Phase 2 of the program, which was designed to boost homeownership for middle-income residents.

Austin planners are also developing new affordable housing policy roadmaps in response to a 2025 state law that limits local affordability programs. The roadmaps are intended to better target lower-income earners amid reduced local autonomy over housing decisions.

State Legislation Reshaping Local Control

Several pieces of state legislation are reshaping Austin's 2026 housing market and limiting local authority. HB 21 imposes stricter affordability requirements for tax exemptions, while SB 15, SB 840, and SB 2477 give the state greater power to override local housing decisions. Together, these laws have constrained the city's ability to set its own affordability mandates, prompting planners to adapt existing programs.

For Austin residents, the changes mean a potential increase in both market-rate and income-restricted housing, though the full impact will depend on developer uptake and the availability of tax credits. The city's resolutions of support for six developments-combined with the new density bonus-are expected to accelerate construction in the near term, but state-level limits on local programs may slow progress on projects targeting the lowest-income households.

City planners continue to refine policies to align with state requirements while pursuing local affordability goals, with further rule adjustments expected as the HOME program changes and new state mandates take effect.